refusal of £200K application

[zakria123]

i applied for tier 1 entrepreneur £200 K category application switching from TIER 2 GENERAL.
caseworker refused my application and the contents are below:

"You have provided financial documents showing you have funds of no less than £200,000, which is from a third party sponsor, Ms......... However, at interview, you were asked about your business start up cost, to which you replied "buying the business on lease, £175,000." As specified in paragraph 245DB(f)(iii) of immigration rules, your £200,000 investment excludes spending on buying the business from a previous owner, where the money goes to that previous owner rather than into the business. As you have stated that you will purchase the lease for £175,000, i would therefore expect you to demonstrate that you have an additional £200,000 to invest in the business in addition to this. However, based on your third party sponsor's bank statement, which show a balance of 34,601,945 PKR, equivalent to £205,966 i am not satisfied that you have the required level of funds for investment in the UK.

The £175000 is paying for buying business lease and business is running business not new business.

experts advise need

[zakria123]

15 views .....no reply

can any body suggest why they donot count lease money as investment,,,,,?

[zakria123]

Some one please

[MTZ510]

15 views .....no reply

can any body suggest why they donot count lease money as investment,,,,,?

Sorry to hear that, i think you should seek professional help as this is the first refusal we have seen on this forum. If the refusal is legally correct then i am afraid they should clearly state that buying existing business is not allowed on this visa.

For entry clearance you should have access to funds and that you have got, so refusing on the ground how you will be spending in future is something which can be challenged in appeal.

[zakria123]

Buying existing business is not allowed.

I seek professional advise from Chartered accountant, he says lease will consider as intangible asset including paying for brand name, stock, inventory, fixture and fitting.


Is it allowed under 245DBF of immigration rule.

Kindly reply

[MTZ510]

Buying existing business is not allowed.

I seek professional advise from Chartered accountant, he says lease will consider as intangible asset including paying for brand name, stock, inventory, fixture and fitting.


Is it allowed under 245DBF of immigration rule.

Kindly reply

By professional advice i meant immigration lawyer.
I know that acquired goodwill is an intangible asset but apparently it seems that this is not allowed under the rules.

[zakria123]

It seems not allowed or not allowed by UKVI.

Because my friend applied with me at same time, same day interview, same day submission and collection of documents passport.
His application is approved, with same but similar type of business plan. if lease investment is not accepted. than why his lease investment is accepted.

Furthermore i checked at HMRC website, they also accept lease investment.


http://www.hmrc.gov.uk/manuals/pimmanual/pim1202.htm

[MTZ510]

It seems not allowed or not allowed by UKVI.

Because my friend applied with me at same time, same day interview, same day submission and collection of documents passport.
His application is approved, with same but similar type of business plan. if lease investment is not accepted. than why his lease investment is accepted.

Furthermore i checked at HMRC website, they also accept lease investment.


http://www.hmrc.gov.uk/manuals/pimmanual/pim1202.htm

Please do not mix HMRC and Chartered Accountant's advice with the immigration rules, for that you need immigration advice from some one who knows the immigration rules.

[GLL]

Hi Zara,

Sorry to hear about your refusal.
I am afraid you didn't help yourself in the interview.
Could you please clarify which business exactly you proposed to do?
I can put you in touch with our solicitor who will be able to help.

[zakria123]

I selected existing / running hotel business to buy.

[GLL]

If you buy a business where 100% of the money goes to a previous owner, this will not be acceptable. It doesn't matter what type of business you buy whether hotel or something else. From my understanding this is exactly what you proposed to do in your business plan.
If this is the case, UKBA decision is correct. So I suggest you come up with a different business plan and file a new application.

Your accountant advice was confusing as he was right saying that lease counts as intangible asset and, hence , will be compliant with the "spent for the purpose of the business" requirement under the visa rule, however this doesn't mean that buying a business on lease from a previous owner where the money goes to this owner will comply with the immigration rules.

A totally different case will be if you INVEST money in an existing business. For example if you invest in a company in hotel business and the money you invested will be spent for business expansion, ie refurbishment, upgrades, etc, this is something that will be acceptable.

Please feel free to contact me should you need further help.

[zakria123]

But my concern is this, if existing business is not acceptable by Home Office, Than why my friend business plan is accepted for existing petrol station paying for lease amount.

Thats why i am confused.